I think that capping the Defense Total at -10 probably makes sense for "normal humans". Any single whiplash, tossed stone, child's kick etc. should have a fairly low chance of being a coup the grace that kills outright, no matter how wounded a character is, unless the attacker is very strong or very very skilled. Slitting a defenseless person's throat with an appropriate tool is a different story, but really needs no mechanics, as Fishy pointed out. That said, not capping the Defense Total does not lead to terribly unrealistic situations anyways.
Problems start to come out with characters of very high Soak, and/or very large Size. With a Defense cap, really high-Soak opponents are almost invulnerable to "normal" attacks. That's ok I think - it's the reason why you look for the proverbial chink in the armour (or Achilles' heel), or you wrestle the opponent to the ground and bury him alive, or whatever.
What I find displeasing are the effects on very large creatures without truly impregnable Soaks. These, you can easily wound lightly, over and over and over. After a while, they are paralyzed by lesser wounds - they have such huge penalties to all actions that they can't do anything that's not automatic. But the Defense Total cap means you still can't Incapacitate (or kill) them in any reasonable span of time, and they can just get away or use those powers that have no minimum success threshold. I call this the Lame Leviathan issue.
I'd note the difference with callen's example: a Size +14 dragon is the size of a warship - sure, it will take you a long time to disable it with an axe. Well, with a Size +14 dragon, it will take you relatively little time to take it down to -50 to all actions, but much much longer to Incapacitate it. I do not think the two types of disabling should be so uncoupled.
The problem is that the latter type of adversary (big but not nearly invulnerable) is a favourite of many SGs. The huge dragon. The towering giant. The many-tentacled kraken. They are just so impressive! And the SG will adjust their soak so that they can be barely wounded by the PCs, trusting their huge size to make the fight last long. And long it will last, with most of it spent by the PCs and the SG trying to see who's the first to roll three 1s in a row!
If you do remove the Defense Cap, the last problem largely disappears ... for "defendable" attacks. But "undefendable" attacks, like a Pilum of Fire or an Incantation of Lightning, still suffer from it. For some reason, that's even worse -- I really hate having the huge dragon unable to do anything after taking six dozen Incantations of Lightning, the Lightning-happy Flambeau symmetrically unable to get the beast to croak, and then a waif comes along and offs the wyrm with a clumsy kick. If there's one situation that I really want the rules to avoid is this one, which I call the Wyrmkiller Waif issue.
Balancing it all is not easy ... I guess my favourite would be:
Wound penalties should make every character progressively more susceptible, without limit, to incapacitation and death (thus avoiding Lame Leviathans) - but more crucially, this should either hold true for both a "defendable" attack (an axe blow) and an "undefendable" one (an Incantation of Lightning), or for neither (avoiding Wyrmkiller Waifs).